China says Hong Kong free to accept India's request to arrest Nirav Modi

In what could be a huge relief for Indian agencies tasked with tracking down fugitive diamantaire Nirav Modi, China has said that Hong Kong, which is a Special Administrative Region (SAR) within China, can consider India's request to arrest the PNB fraud accused based on local laws and mutual judicial assistance agreements between Hong Kong and India.

Chinese foreign ministry spokesman Geng Shuang told a media briefing that "according to the one country two systems and basic law of the HKSAR, under the assistance and authorisation of the central government, the HKSAR can make proper arrangement on judicial mutual assistance with other countries," he said. "If India makes relevant request to the HKSAR, we believe the HKSAR will follow the basic law and relevant laws and under relevant judicial agreements with India with the relevant issue," he said.

With China giving its go-ahead, the arrest of diamond merchant who defrauded the Punjab National Bank of over Rs 13,000 crore could well be a matter of time. Though Hong Kong enjoys a greater autonomy under 'the Handover' agreement signed by Britain and China, Beijing had exercised its influence over the autonomous territory in the past when National Security Agency whistleblower Edward Snowden fled from Hong Kong to Moscow.

However, China is unlikely to grant any special favours to PNB scam accused Nirav Modi.

While India and Hong Kong have an extradition treaty, there is no such treaty with mainland China. Just last month, India and Hong Kong signed an agreement on "Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income."

Earlier, Minister of State for External Affairs, VK Singh had told Parliament that "the ministry has sought the provisional arrest of Nirav Deepak Modi by the government of the Hong Kong Special Administrative Region (HKSAR), the People's Republic of China."

Modi, ranked by Forbes as India's 85th richest man with a net worth of $1.74 billion, opened his first boutique in Hong Kong in 2015. Last year, Modi opened another boutique at IFC Mall and a 3,000 sq ft flagship store at an upmarket shopping complex in Tsim Sha Tsui.

To stop Modi from moving to a different country, the government had approached the authorities in Hong Kong for his provisional arrest. According to the Basic Law governing Hong Kong, the SAR is "vested with independent judicial power, including that of final adjudication". However, the courts of the Hong Kong Special Administrative Region "shall have no jurisdiction over acts of state such as defence and foreign affairs".

This comes a day after special CBI court in Mumbai issued non-bailable warrants (NBWs) against Nirav Modi and his uncle Mehul Choksi in connection with the cases related to banking fraud in the Punjab National Bank.